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Wednesday, 20 May 1936


Senator A J McLACHLAN (SOUTH AUSTRALIA) (Postmaster-General) . - The taxpayer may purchase a property in a state of disrepair and expend considerable sums to restore it to a habitable condition. It is considered that this expenditure is of a capital nature, which if it had been incurred before the purchase would have been reflected in the price paid ; therefore, this is treated as capital expenditure. The repairs must be to any premises or part of premises, plant, machinery, implement, utensils, rolling-stock, &c, occupied or used by him for the purpose of producing assessable income, or in carrying on business for that purpose. For example, wear of machinery, the deterioration of buildings under the influence of weather, and of premises in which acids are manufactured, are forms of depreciation for which an allowance is made. In addition to this, however, provision is made for repairs, and the Commissioner of Taxation decides how much ought to be allowed for depreciation and how much for repairs. While expenditure on repairs of a capital nature is not an allowable deduction, repairs which are incidental to the earning of the income, and by way of every-day expenditure are deductible. Sub-clause 2 refers to expenditure incurred upon repairs to any premises or part of premises not so held, occupied or used. In that case no deduction will be allowed.


Senator Collings - What is the position of a worker who paints his home?


Senator A J McLACHLAN (SOUTH AUSTRALIA) - Such expenditure is excluded under subclause 2.

Clause agreed to.

Clauses 54 to 62 agreed to.

Clause 63 (Bad debts).







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